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Interview with Paul Walsh; Interview with Luis de Guindos; Women in the Workplace; The Greek Agreement; Mixed Views on Greece's Progress; Thousands to Protest Further Cuts in Athens; Long Road to Rescue; ECB Holds Europe's Interest Rate at Record Low; The UK Stimulus; European Markets Up; Cisco Beats Forecasts, Up 45 Percent; Cisco's CEO Finds Right Formula; TripAdvisor Shares Tumble; CEO of TripAdvisor Responds; Mining Boss Waives Bonus

Aired February 9, 2012 - 14:00   ET


RICHARD QUEST, HOST: A Greek deal with a deficit of detail and an abundance of doubt. In Brussels, ministers say it's not ready, while in Athens, more austerity and more protests. We're told there'll be an explosion of social unrest.


CONSTANTINE MICHALOS, PRESIDENT, ATHENS CHAMBER OF COMMERCE AND INDUSTRY: Once again, the social cohesion is of paramount importance, and the fuse, the social fuse is running extremely short.


QUEST: Also tonight, a fiesta of chief execs. Cisco, Diageo, Rio Tinto, PubAssist (ph), and TripAdvisor.

This is the place to be, because I'm Richard Quest, and I mean business.

Good evening. Tonight in Brussels, Europe's finance ministers are deciding if Greece has done enough to unlock $170 billion worth of bailout funds, while in Athens, the Greek prime minister Lucas Papademos announced the coalition government had reached an agreement on new austerity measures.

Back to Brussels, where Greece's finance minister arrived with a deal in hand. He said progress had been made with private bond holders.


EVANGELOS VENIZELOS, GREEK FINANCE MINISTER: After a long, dark period of negotiations, we have finally a start level agreement with the troika for a new, strong and credible program.

We have also a deal with the private bankers on the basic parameters of the PSI. We need now the political endorsement of the euro group for the final step.


QUEST: So, you have the PSI, which is the private banks. You have the political parties, which is the bit in Greece for austerity. And now he says that they need the eurozone's -- the euro group's approval.

Well, other officials arriving at those meetings in Brussels had mixed views on the progress so far. There was optimism from the IMF head, Christine Lagarde, which wasn't necessarily shared by everyone.


CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: Well, there's clearly some very encouraging news coming out of Athens, and it's -- after the very heavy-duty work that has been done lately, I think it's positive. Thank you.

WOLFGANG SCHAEUBLE, GERMAN FINANCE MINISTER (through translator): The agreement is not yet ready, but we have a discussion status that has been agreed upon. But no one is assuming yet that this status will find approval and that it can be fulfilled.

From all that I know, and we do have some more negotiations, we don't have the parameters, yet, that have been clearly described in the European Council.

MICHAEL NOONAN, IRISH FINANCE MINISTER: I understand progress has been made, but I have no assurance that it has been concluded. So, we'll have to see what the elements of the deal are.

Obviously, the program countries are different and their situations are entirely different, so a deal for Greece is welcome in general terms, because it stabilizes the eurozone, and the eurozone needs to be stabilized.


QUEST: So, those are the views, and we'll return in a moment to the actual agreement, what if any, there have been between Athens and Brussels.

Back in Greece, deeper cuts will be a bitter pill for the Greek people to swallow. As you saw today, thousands of Communist Party union members rallied against the austerity in the streets of Athens. The banners said, "We are at war" and "Attack the Troika," a reference to the IMF and the European Union.

Greece's two main unions, which represent half the Greek workforce, are planning a two-day walkout starting this Friday.

In this scenario, with so much unrest, I spoke with Constantine Michalos, the president of the Athens Chamber of Commerce and Industry about the deal.


MICHALOS: There was an agreement coming out of the two main political parties. I think the third one is pending approval. In any case, this agreement will be ratified, I believe it will be ratified, with perhaps a few parliamentary vote losses by Sunday.

However, it's not a question of ratification, it's a question of implementation, and this is where I have my serious doubts.

QUEST: So, as I look at the measures and the reduction in minimum wage, it's reduction in pensions, it's reduction in civil service. So, I ask you this: what is it that people in Greece want from the eurozone, from the troika, from the IMF? You talk about wanting stimulus and growth. What is it you want?

MICHALOS: Well, I can only speak for the business sector, and the business sector at the moment wants less taxation, and we want less taxation, first of all because we have proven that when taxes are lower, the actual revenues, the tax revenues for the state, are much higher compared to other cases as far as the GDP is concerned.

So, we would first of all have higher revenues, and we would be able not only --


QUEST: No. No --

MICHALOS: -- to have local and --

QUEST: Not --

MICHALOS: -- more local investment --

QUEST: Not immediately, you wouldn't. If you're going to go for a low tax, basically a Keynesian type of answer, you're going to have to find somebody who will foot that deficit until growth returns.

MICHALOS: No, no. There won't be a deficit. This is exactly what I'm trying to point out. We have proven with a study that we have carried out in our study center at the Athens Chamber of Commerce and Industry to the previous government that when you compare two different periods in Greece, the 80s, 90s, and the last decade, that when we've had a lower tax rate, business tax rate, the revenues against the GDP were much higher than those when we had much higher tax rates.

So, you will actually increase your tax revenue. You will increase your competitiveness, which is lacking completely at the moment, and you will be able to have a business sector which at least at the beginning will move in the right direction which, today, it's not doing at all.

Because you're facing a liquidity crunch, you've got an absolutely stagnated business, banking sector.

QUEST: How much do you fear that if the eurozone continues to push the lash of austerity upon Greece, either bankruptcy or civil unrest becomes the only answer?

MICHALOS: Well, Richard, I have to say that once again, that social cohesion is of paramount importance, and the fuse, the social fuse is running extremely short.

I think that the attempt of implementing these harsh measures, especially the ones concerning the 25, 22 percent reduction in the pensions and up to 32 percent reduction in the minimum wage, which I have to point out, is one of the lowest in the European Union.

Anyway, as it stands at the moment, would be sufficient to ignite this social explosion, which I fear for the last six months.


QUEST: The head of the Athens Chamber of Commerce. Jim Boulden is with me, now.

I'm confused. We have a deal, which one party doesn't take part of in Athens. We have Schaeuble saying that there's not necessarily a deal. So, what is your understanding about the current position?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I think what Olli Rehn also said is that there is -- basically that we need to see that Greece can convince the European partners that what they've come up with is credible. So, they haven't been convinced as they gathered in Brussels this evening.

QUEST: But what they've come up with, as I remember, is a fairly substantial list of further cutbacks on the state. Job losses --


QUEST: -- minimum wage cuts.

BOULDEN: For new hires, yes.

QUEST: For new hires.


QUEST: You've got a list, there.

BOULDEN: Cut 150,000 jobs by 2015, cut, what? $4 billion out of the economy this year in order to cut the deficit.

QUEST: So where's -- so where's the growth in all of this?

BOULDEN: OK. No -- well, I was going to say first, let me say this really quick.

QUEST: Go on.

BOULDEN: The first measures that they have taken might seem severe to the people in Greece, but they haven't been enough. Even what they've agreed to haven't been implemented enough.

So, what Europe is fed up with is Greece promising but not delivering. That's really hard to tell people on the streets of Athens, I know.

QUEST: OK. So, when we hear the head or the president of the Chamber of Commerce --


QUEST: -- saying social unrest, the fuse of social unrest is getting short, we've heard that before.

BOULDEN: Yes, we have.

QUEST: But the difference between then and now is that the situation has got a lot worse for ordinary people.

BOULDEN: The economy has grown a lot worse. Obviously, five years of deficits. The whole idea of this second bailout was to put Greece back into growth in 2013. I cannot imagine any way that that is going to be possible.

QUEST: Do they get the money?

BOULDEN: Yes, they have to get the money.

QUEST: No, they don't have to. They have to --

BOULDEN: They have to get the money in some way, but will it be enough? It's not enough at the moment.

QUEST: So, again, I come back to, has a deal been done between -- within Athens, within the government there, that the eurozone will find acceptable? And if they don't, what more do they want from the eurozone?

BOULDEN: I could answer that question if we had the details of what Mr. Papademos and the leader of the opposition agreed to today that Mr. Venizelos is taking to Brussels. We don't have that detail.

They have to pass it through their parliament first. They have to get the eurozone to agree. Then, they have to get parliament -- for instance, in Germany next week, to agree. A lot of hurdles.

QUEST: Venizelos said that the PSI has been agreed.


QUEST: And that they're at the Paris -- I think they're probably in Paris at the moment. Is that your understanding?

BOULDEN: Sure. I mean, we've known for a couple of days that that seems to -- they seem to agree, but nobody wants to jump first, it seems like. They've been waiting for the Greek government to come together. Once this happens, if the eurozone can agree to this, then PSI comes with it.

QUEST: Jim, many thanks, stay with this. More to go.

As Europe's debt crisis trundles on, two of Europe's major central banks decided the economy is strong enough to justify raising -- or at least dealing with rates. If you'll join me over here, you'll see what I'm talking about.

The ECB has held rates at the record low of one percent. Now -- but they did some interesting things to do a little bit of easing.

The ECB did relax some of the collateral criteria which is used from some of the larger loans and repo operations, and that is a de facto easing, because it means that banks will be able to take much greater role in the next LTRO 3 loan, with bids coming up at the end of February.

President Draghi said inflation will remain among 2 percent for several months, then dip below. And he said these low rates are supporting the recovery.


MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK: Looking ahead, we expect the euro area economy to recovery very gradually in the course of 2012. The very low short-term interest rates and all the measures taken to foster the proper functioning of the euro area financial sector are lending support to the euro area economy.


QUEST: So, that was the ECB and President Draghi, who refused to say anything about whether the ECB would -- what it would do with its $60-odd billion worth of Greek bonds, whether it would transfer them to the ESFS. He continues to say he will not have monetary financing of debt.

The Bank of England in London, the MPC held rates, they held them at a half a percentage point. That's -- it's been at that level since March of 2009. But -- QE3 did come along another $80 billion -- billion asset purchase program.

Now, the total amount -- let's put this into -- it's 50 billion pounds, it takes it over to three and a quarter billion, 325 billion on the sterling, and the committee said inflation would likely undershoot 2 percent target without this stimulus.

So, to the markets and how they ended the day. We got the FTSE, the CAC, and the DAX all up, not by much, but you can see why some of these markets were up sharply, particularly bearing in mind a dose of QE3 and ECB holding rates.

When we come back in just a moment, it's a debt of solid earnings that comes from Diageo toasting the emerging markets. Cisco says it's benefited from a vigorous shakeup. The chief execs, a bevy of chiefs on tonight's program.



QUEST: It's been a year of painful restructuring, which has finally paid off for Cisco, where net income for fiscal Q2 is up more than 45 percent. That's an extraordinary strong performance, from $1.5 billion to over $2 billion.

Now, on an EPS, it's 27 to 40 cents per share, and it wasn't just on that but cutting costs. Rev increased by 11 percent, much more than expected last time. And for the current quarter, Cisco expects revenue to grow between 5 and 7 percent. It's fascinating, it'll boost the quarterly dividend from 6 to 8 percent -- 8 cents per share.

When you look at how Cisco has turned itself around from the dark, dog days of the early part of the century, when Cisco -- people were really talking about it whether it was a spent force. Now, Cisco's boss, John Chambers, has spent the last 12 months cutting jobs and switching the company's focus to more profitable products. It got a competitive price.

John Chambers joined me earlier, and I began, I needed to know, "All right, all right, Mr. Chambers," I asked him. "You've done all right in this quarter."


QUEST: "What's next?"


JOHN CHAMBERS, CEO, CISCO: Richard, we are, obviously, very pleased with where we are in our turnaround. And as many of our shareholders said to us last night after the conference call, they almost expected us to do this, because we've done this four or five times in the past.

We're in good shape versus our peers. One of our European peers, as an example, announced the layoff of 1800 people this morning. So, we've been through the changes that many of our peers are about to go into, and the way you keep it going is to continue to gain market share and sharers spend.

So, when our search matter orders were up 12 percent and our peers actually, often, were down, that shows you what we're doing. We're in the hot new markets, such as Cloud, such as pervasive video, such as collaboration, and those are going well for us.

But make no mistake about it. It's a journey, and companies must constantly reinvent themselves. We used to reinvent ourselves every five to seven years. It now needs to be an ongoing process.

QUEST: It --

CHAMBERS: Those who do it well will lead. Those who do not will get left behind.

QUEST: It's taken a few years to find the right formula following the dot-com boom and bust, so are you satisfied that you do have that right formula now?

CHAMBERS: In terms of our vision and strategy, Richard, absolutely yes. Execution on it, I think you'd probably give us pretty good grades on the execution. The stock's up 45 percent in the last six months.

And we're gaining share and routing and switching, we're gaining share in the data center. There are always areas that we need to improve on and grow at a faster pace, and we're pretty critical of ourselves.

So, I think in terms of what we can control or influence, we're in great shape. We -- we looked at our peers, 70 percent of our peers actually got it down or were below the estimates for the most recent quarter, got it down for the next quarter.

We were one of the few that exceeded -- by the way, with record earnings per share, up 48 percent year over year, record revenue. And we actually got it up a little bit slightly versus street consensus.

So, I think we're in a good spot, but boy we've got to continue to stay focuses and return value for our shareholders, our employees, our customers, and give back to society. I'm a huge believer in corporate social responsibility, as you know.

QUEST: Right, I do, indeed. And we've talked about this, and you talked just then about the things you can control. The thing you can't control is the global economic environment. Just in, whilst you and I have been talking, it's announced that there's been a deal in Greece, at least, between the political parties.

But Europe still remains a worry. And so, I wonder, as you look at the globe, where is your major economic concern?

CHAMBERS: Europe, actually I am a little bit more optimistic than many of my peers, and I do that having watched the government leaders talking to the local business leaders. We said last quarter we felt people were a little bit too pessimistic about Europe, and our orders were up 7 percent this quarter.

I'd probably make the same statement. I was impressed with how the chancellor of Germany, how the prime minister of the UK, were really focusing about how we create jobs, and what does it take to partner with business to create those jobs in a win-win.

So, I'm probably a little bit more optimistic than, perhaps, others, but also our business justifies that optimism at this time.


QUEST: John Chambers of Cisco. We've many more chief execs. When we come back, TripAdvisor, don't look at your share price today, taking a beating on the NASDAQ. It proves that once you're no longer got a big brother to protect you, all bets are off.



QUEST: What about shares in the travel website TripAdvisor have taken a very sharp journey down. Right now, they're off more than 14 percent on the NASDAQ because its earnings left Wall Street sorely disappointed.

Yesterday was the first report since the company split from Expedia. Profits were up 19 percent in the last quarter from a year ago, less than expected. The company is reportedly expecting revenue growth to slow this year. The benchmark analysts have since downgraded its stock from a buy to hold.

The chief exec of TripAdvisor, Stephen Kaufer, joins me now from Boston. I am reminded of the old saying, "No good deed goes unpunished." So, you have a strong revenue increase, net income isn't as much as the market had feared, and --


QUEST: -- bang.


QUEST: You get slammed by the share price.

STEPHEN KAUFER, CEO, TRIPADVISOR: For us, it's all about building a really great long-term company. We're making the investments that we want to do that, in fact, have proven out to be successful.

At this point, we're in 30 different countries, we have over 60 million reviews and opinions, and that's just a testament to how many people all around the world love researching their trips on TripAdvisor.

QUEST: All right. All right. But the markets and the analysts know that you're investing in the future, they know, because you briefed them on what your plans are. So, why, then, are they not giving you the benefit of the doubt in the market today?

KAUFER: Well, if you think about what we had to go through as part of the spin off from Expedia, we had to educate everyone on what the TripAdvisor business was, and we need to find the shareholders that like the fact that we are a long-term growth story with an incredible track record of growing year in, year out.

If I happen to disappoint some very short-term focused folks on -- as the market would say today, that's fine. That's really not what I'm looking to do. We're building a great company. We're continuing to build a great company. And if that's a short-term hiccup for some, that's not what I'm managing the business towards.

QUEST: OK. Let's talk about what you're going to do with TripAdvisor. You and I, I think, have talked about this before. I am still not the -- convinced that I understand where you're taking TripAdvisor. I like the company, I like the app, I use it, like any other business traveler does. But I can't see where you grow it.

KAUFER: Oh, there's so many areas in which to grow this app and the whole website. First off, you probably are a member of Facebook, you probably have some friends there. And so, we're deeply integrated in with Facebook, now, so that you're able to get the wisdom of your friends.

It's our whole social experience that's enabling you to not only see the reviews from the millions of different people that have written on the site, but also from the people that you really know.

And we really have the scale to be able to deliver the fact that, if you and I are friends on Facebook and you're coming to a town that I've ever visited --


QUEST: All right --


QUEST: But -- I see that, but you can't build your company just by parasitically linking it to another social media thing. What new paradigm, what new shift, what's your new mousetrap that you're going to use besides just reviews that you're going to catch me with?

KAUFER: But that's just it. You've got reviews, but now you've got reviews from your trusted friends. So it elevates the level of valuable advice that you're getting on the trip.

Now, factor in mobile, where you're actually getting information when you're in market. You're standing on a street corner. What's the best restaurant that's good for kids, Indian food, next to where I'm standing now? More in-market stuff.

And then you go to the whole rest of the world. We have incredible efforts underway in China and Asia-Pacific to just expand the overall reach.

QUEST: Stephen, good to have you on the program, and we'll talk more about it, and I thoroughly agree, actually, with your view. Short-term-ism of the market is, perhaps, the CEO's worst enemy. Many thanks, we'll talk again in the future.

Now, Rio Tinto's chief executive has waived his bonus for the year after the failed takeover of Alcan wiped out its companies profits in 2011. Rio Tinto had to write off almost $9 billion on that deal. Profits were down 59 percent last year.

Ignoring the lump sum, underlying profits hit a new record of 11 percent. It really does just show you how one bad deal -- well, this was a monster of a deal that went horribly wrong. So, I asked Tom Albanese, the chief exec, if basically the underlying results were due to emerging markets.


TOM ALBANESE, CEO, RIO TINTO: We are seeing, increasingly, the growth in the global economy is happening in the emerging markets. It's China, it's going to be southeast Asia, the BRIC countries. There are going to be a number of others that are going to be expanding.

There are over 5 billion cell phones in the world right now. That means 5 billion consumers out there that actually are learning more about how other people live. Their expectations are rising.

They want radios, they want iPads, they want televisions, they want heating, they want air conditioning, they want the products that require more of the product that we produce.

So, we're in the business of basically providing those items in the front end of the supply chain so that billions of --


ALBANESE: -- our business, and that's why the prospects for the mining sector, particularly those that are best in it, is particularly good.

QUEST: Right. The prospects for the mining sector. Let's talk about mergers and acquisitions. Glencore and Xstrata, the big deal. Do you have a problem with it?

ALBANESE: Again, all through my career, from the time I started working as a college student for an oil company that wanted to get into copper, I've been seeing change in the industry, I've been seeing evolution, I've been seeing mergers, I've seen de-mergers, I've seen new players come in, I've seen some players leave the business.

I think this is just part of that evolution, so there's nothing I see here now that, frankly, surprises me.

QUEST: But do you worry the merger could provide stiffer competition to your own company? Is that a concern?

ALBANESE: I think, from our perspective, I don't think anyone can compete with us on exploration, on development, operations, delivering the goods to the market. So, I think we're very well-placed --


QUEST: You talked about Alcan and the takeover that happened in --


QUEST: -- today. So, I wonder, what did you learn from that acquisition that did go so spectacularly costly in the long run? What is the lesson?

ALBANESE: Well, I think anyone who has been a chief executive before, during, and after the global financial crisis recognizes that the world had a different view of life in a number of sectors pre-global financial crisis. And we're still going through the after effects of the global financial crisis as we speak now.

We are, obviously, more circumspect, we're more realistic about the present conditions. We can't, though, hide our head in the hole. We have to look to the future. So, that's exactly what we're doing. We're looking at taking those businesses that are well-positioned and look to the future.

But again, we all think about what happened back then, and we recognize the fact that, as you say, they were heady days.


QUEST: When we come back, our smorgasbord of chief execs continue.



QUEST: Hello, I'm Richard Quest.

More QUEST MEANS BUSINESS in a moment.

But this is CNN. And on this network, the news always comes first.

An opposition group says the death toll in Syria has soared to 131 on Thursday. We're told that more than 100 of those killings happened in the city of Homs. Syrian state TV claims, in their words, armed terrorist gangs fired seven shells into Homs earlier today.

Despite the ongoing violence, hundreds of anti-government protesters continue to demonstrate in cities around Syria. This is live pictures that's coming from the southern city of Daraa.

Greek political leaders have hammered out a new austerity plan as a step toward securing a further multi-billion dollar bailout from the Eurozone. Word of the agreement came before a key meeting in Brussels, which involved Eurozone financial markets.

The search has begun for a new manager of English national football team. Fabio Capello resigned on Wednesday after criticizing the English Football Association's decision to strip John Terry of his role as team captain. Harry Redknapp is believed to be the overwhelming favorite to take Capello's place as manager.

Police pulled the Maldives' deposed president outside during angry demonstrations against what he says was a coup d'etat. The former president, Mohamed Nasheed, is now believed to be at a home surrounded by a large crowd. The country's former foreign minister says Nasheed faces arrest on unknown charges.

Heather Mills, the ex-wife of Paul McCartney, has appeared at Britain's ongoing media ethics inquiry. She testified that a reporter called her about a voice-mail Paul McCartney left after an argument. She says she didn't share the message with anyone and that the reporter found out about it illegally.

Diageo is the world's biggest distiller and beat expectations despite stagnant sales in its key U.S. and European markets. Half year earnings up 16 percent. Operating profit nearly $3 billion. Net sales were up, well, high, 8 percent. Growth in emerging markets offset flat sales in Europe. Net sales, it all accounted for a 40 percent impressive total turnover.

People in emerging markets aren't only drinking more, they're drinking better. I don't mean that they're getting it in the mouth and getting it down them better. According to the Diageo chief executive, Paul -- Paul Walsh, instead, they are drinking premium sales, which are on the rise, Johnny Walker in particular, in Brazil, China and stacc. The chief told me Diageo is focused on expanding in emerging markets.


PAUL WALSH, CEO, DIAGEO: We are building our business in the emerging markets. It's now 40 percent of our total business. Growth was 18 percent. And equally, our luxury brands, the Johnny Walker Blues, the Tanqueray 10s, the Zacapas, in the developed world, they're doing very well. So people may not be drinking more, but they're drinking better.

QUEST: So for you, as the chief exec, what does that mean you have to do to balance the growth and to decide where and how to direct the company?

WALSH: Well, first of all, we have to make sure that we expand our position in the fastest growing markets of the world. The -- the emerging markets, as I said, are 40 percent of our business. We've got to make them a larger component.

We're encouraged by what we see in the US. The U.S. is improving. And, also, we're encouraged by what we see the premium end.

Europe is flat...

QUEST: Right.

WALSH: -- and we need to manage Europe to make sure that we don't see any slippage there.

QUEST: So to grow market share, do you do it by acquisition?

In other words, that's a tactful way of asking, are you looking at buying something?

Or do you do it just by good old-fashioned marketing, in which case you're going to spend more money anyway?

WALSH: Well the first thing you have to do is grow the brands you already own, because if you don't make a good job of that, you'll probably not be allowed to make the acquisitions that you want to make.

So the first rule is organic growth. Then, if you can argument that growth with sensible, well-priced acquisitions, then you have a winning formula.

QUEST: Are you looking at anything?

WALSH: We're always looking.


WALSH: And if you look to this past year, we bought Mey Icki in Turkey, a fabulous business. We bought Serengeti Breweries in Tanzania, a fabulous business. And we bought Meta Abo in Ethiopia, again, a fabulous business. All very complementary to what we do and all in the fastest growing markets of the world.

QUEST: And I would add to that all, all niche markets.

WALSH: Actually, I would then say niche, because there's some pretty big populations in these markets. And the one thing that they all have in common is the emerging middle class, more people becoming economically empowered and having the ability to afford our brands. And that's why the prospects over the next 10 years are very, very lucrative.

QUEST: Well, how worried are you at this anti-business trend that there might be percolating up in the United Kingdom at the moment?

WALSH: I -- I'm aware of it and I -- I do have some concerns, because all the rhetoric is not doing the U.K. any favors. If you're an outward investor, if you're looking to invest in the U.K., you'll hear all this and you'll think twice. So it's not helpful.

The second thing is, it's not productive. At the end of the day, we need to be having a debate about job creation and about exporting. That's what Diageo is about.

If you look at our scotch whiskey sales, up 15 percent. That's exports. That's where the debate should be.


QUEST: The number he came up with on Scotch whiskey exports was something like 125 pounds a second.

More when we come back and we'll have the weather forecast, where it's cold. That's what you really need to know.


QUEST: So it's cold up there, it's cold over here, it's cold down there.

Jenny Harrison is at the World Weather Center.

Do we really need to know much more?

JENNY HARRISON, ATS METEOROLOGIST: You do. You need to be prepared for this, Richard.

There are some warm spots, as well, if you're feeling a bit cold across, though, in Europe, you can head to the Canary Islands. That's always a good location. Temperatures there sort of in the high teens Celsius, mostly sunny. And it's not bad, really, in Southern Poland, either. But it really is, of course, still very much in the deep freeze across the central and eastern areas. More snow in the southeast, as well. And some snow right now heading across the UK.

But look at these temperatures. These are the overnight lows into Thursday morning. So Bucharest at minus 24. And, by the way, Kiev was minus 20 Celsius, so not the coldest place in the last 24 hours. But even Sofia, minus 15 degrees this morning.

And so just look at the total now. We've got 25 days in Kiev where the temperature has not -- it's not even close to freezing, let alone getting above freezing. Of course, the average high temperature is minus two. Poland, as well, Warsaw there, Bucharest, and so it goes on.

And we were talking, of course, as well, about the -- the significance of the River Danube across in Europe, the second longest river in Europe, and, of course, how vital this is for all the goods, for commerce, generally, throughout Europe.

Well, now we've got this situation where the smaller tributaries are completely frozen. But it is getting worse day by day. There's now this long area here where you can see highlighted in red, it's 90 percent of this has got floating ice in it and it's considered too dangerous for ships. So it has been suspended and it freezes all the way into the river delta. So not a good scenario at all. the temperatures are going to stay below freezing, as well.

There's another storm system coming in with the heavy snow and still, of course, bitterly cold, with this high pressure still very, very dominant and just not budging at all.

We've got a system coming in to the northwest, but it's not going to produce huge amounts of snow, not like the snow across the southeast.

Look at these totals in the next 48 hours. Another 20 centimeters in Sarajevo and remember literally in the last week, we've had over 100 centimeters in that particular city.

Here's an incredible picture. We've been talking, as well, for the last few days -- of course all these pictures coming in across Europe. And we've been talking about the sea spray ice and how it literally is just this fine mist of cold, cold water in the freezing conditions, freezes. And that's exactly what you're looking at here. And behind each of these lampposts, there's something behind each of them which has obviously enabled this ice to form. But even so, it does look incredible.

But here's something that is possibly a positive from all of this bitterly cold weather. In the Netherlands, the whole country, it seems, has now got ice fever, particularly ice skating fever. Leeuwarden in Friesland, this is a race which has not been able to be run for the last 15 years. It's a 200 kilometer race, 16,000 skaters. But unfortunately, there is still, despite this cold weather, still some big areas where there's not enough thick ice. There's, as I'm noting, it's got to be 15 centimeters. They're busy keeping the snow off the canals so that they can actually, hopefully, keep the temperature down. But, Richard, I have to say, as we head into the weekend across this portion of Europe, it does look as if a bit of a marvelous spell of weather is heading in.

But the people, though, in the Netherlands, really enjoying this cold weather.

QUEST: Jenny Harrison on the ice.

Many thanks.

And that's QUEST MEANS BUSINESS for tonight.


Whatever you're up to, I hope it's profitable.



I'm Juliet Mann.

And this week, with the Eurozone's finances on thin ice, we're talking about the prospects of change.

(voice-over): London's Canary Wharf Estate, one of Europe's busiest banking hubs and home to over 93,000 employees. When its tallest tower opened for business in 1991, Canary Wharf's offices remained empty. Its founders flied for bankruptcy.

(on camera): Their fortunes turned. Banks and business moved in. It's become a symbol of London's global standing. It's a turnaround that might give hope to many a business as they go sliding across Europe.

(voice-over): Coming up, Spain's economy minister, Luis de Guindos, on his country's prospect of a turnaround. And I spoke to a CEO who's also trying to change the course of gender representation on company boards. Helena Morrissey says more women equals more profit.

(on camera): Labor reform is key to restoring economic growth in Spain. That's the view of Luis de Guindos, Spain's economy minister.

He chatted to Richard Quest at the recent economic forum in Davos.


LUIS DE GUINDOS, ECONOMIC AND COMPETITIVENESS MINISTER, SPAIN: We have to act in two different areas that you know are, in a certain way, interconnected.

The first one is that we have to implement fiscal austerity. This is not an option. This is something that we have to do. And we have to do it taking into consideration that we have a slippage in the fiscal deficit last year and that we have to correct it and that we have to do it without, you know, impairing too much the economic activity in the short-term.

But simultaneously, we are going to implement, very rapidly, very swiftly and very conclusively, the reforms that the Spanish economy needs.

QUEST: Which are what?

DE GUINDOS: I would say that, you know, we have two main problems. The first one is to restructure in the banking industry. We have, you know, to reduce the gap between the book value and the market value of the assets, the real estate assets of the Spanish banks have in their balance sheets. And this is something that we are going to accelerate to a, you know, a program for (INAUDIBLE).

And, you know, this is going to give rise to a -- to a second round of consolidation in the spring that will have a sounder and safer banking industry at the end of the process. This is one of the main performers.

QUEST: And in terms of reform of the labor practices, in terms of the reforms that makes it easier to do business, as the people who are watching this program will want to know what you're going to do to make the environment more conducive for pro-growth business.

DE GUINDOS: I think that the labor market reform is going to be key. It's going to -- to be the vital, you know, instrument to restore growth and to promote growth in -- in Spain.

And I think that it has to be based, you know, on frame -- on three main pillars.

The first one is to -- to -- to modify the wage bargaining process, the wage settlement process in Spain that now, you know, impairs labor conditions in the small and medium companies.

Secondly, we have to simplify, you know, the number of contacts that we have in Spain, trying to bridge the gap with -- with the outsiders and the insiders in the labor market.

And finally, and this is -- this is also -- this is also important -- we have to -- to -- to improve the active policies in there, in for -- for the unemployed people to make, you know -- to make them, you know, and to force them to go much more rapidly to the -- to the -- to the back, to the -- to find taking a job much more easily.

QUEST: Will the Spanish people accept the pain that you or your -- the government is about to inflict?

DE GUINDOS: Well, we are not going to -- to inflict pain. You have to take into consideration that you have to bear in mind that, you know, a society with a 23 percent unemployment rate has a lot of pain now and it's suffering under that pain.

QUEST: Oh, just -- but...

DE GUINDOS: It's suffering under the pain.

QUEST: But -- austerity of restructuring budget deficits and the measures you are taking are not going to bring down unemployment any time soon.

DE GUINDOS: One of the main problems of the Spanish economy now is that, you know, we've had financial restraints from -- from -- from overseas. If we do not reduce our fiscal deficit, then, you know, the financing of the Spanish economy will be -- will continue being extremely difficult.


MANN: Luis speaking just there.

Unemployment in Spain has risen to more than 20 percent. Young people in particular are affected, with more than half of 15 to 24 year-olds unable to get jobs.

I caught up with one Spaniard who's come to London to find work after deciding that there's no future for them in Spain.


CHRISTINA MANOSA, SPANISH EXPAT: Here, there was more options. I -- I took the right decision. It was a hard decision because I -- I would like to live in Spain with my family but I want to work as a social worker. That's what I want to do.

And in Spain, it was pitiful. It was probably not going to be possible. It would be very bad pay.

MANN: How much of a problem is it for Spain that so much talent is being lost?

MANOSA: Well, I'm not sure if it's Spain, as the government, that realizes how much talent they are losing, because everybody that's a professional, especially in these fields, which was the earliest ones, all health services and all that, came out of the country. There's no one there now.

MANN: What do you think that the government should do about it?

MANOSA: Obviously, review the payment wait -- the minimum wages and review the payments. Review, also, housing options for people, because people cannot have access to housing, which is one of the basics, education.

MANN: What would it take for you to go back to Spain?

MANOSA: I don't see myself going back, if I'm honest with you, because I don't think things -- things are going to change. If you ask me, I don't think I'm able to do it right now. And I don't think I will be able to be in many years.


MANN: After the break, I visit an exhibition and female CEO, both tackling the issue of women in the workplace.



I'm in the women's library, part of London Metropolitan University. This exhibition charts the history of women in the workplace, from when it was all washboards and ironing.


MANN (voice-over): We've come an awfully long way since these early days of women in the workplace. But the corporate world is still far from a level playing field. Gender pay gaps and a lack of female representation at board levels have prompted European governments to look at ways to get more women to the top.

Helena Morrissey, a CEO with a multi-billion dollar portfolio, campaigns for greater female representation in business. She argues more diversity makes business sense.

But she recalls the early days of her career, when starting a family made bosses doubt her commitment.

HELENA MORRISSEY, CEO, NEWTON INVESTMENT MANAGEMENT: I was the only woman out of 16 in my team. And I was passed over for a promotion and I asked my boss sort of why. And I'd just had my first child. And that was quite an -- an eye-opener for me.

MANN: Eight more children later -- yes, you heard right -- she now oversees around a $50 billion of funds under management and almost 400 employees. She also spearheads the 30 Percent Club, to campaign for greater female representation at the top of British companies.

MORRISSEY: The sort of identikit culture that you see on a lot of boardrooms, all male, all white, all a certain age group, you know, actually resulted in a lack of challenge, because I have had more cynical reactions right at the beginning, when people said, this is all about, you know, diversity and political corrections, it has nothing to do with actual achieving success in the business. And I'm running a business, so leave me alone.

Those same people now are saying, well, just, I need to know how I can get the right candidates through. And I think we have seen a bit of a mindset change and moving away from this idea that it is just a women's issue.

MANN: Countries across Europe are adopting quotas to put women in director's seats. Norway started the push in 2002 and has reached its 40 percent mandate. Spain and France have set 40 percent goals for the next three to four years respectively.

VIVANES REDING, EU JUSTICE COMMISSIONER: Those companies with an -- a collaboration of male/females in decision-making have a better corporate result, make more money. We have 60 percent of our university graduates who are women. We lose them out. We lose talent. We cannot afford that. We need to put women there, where they can serve the society, serve the economy. Probably, we will need quotas in order to make the breakthrough. But quotas is not the goal. Quotas is a tool.

MANN: With legislation the hot topic across Europe, the signs are that business is getting the message. France Telecom Orange's policy, anyway, is to aim for the same proportion of women on their board as they have working in the company.

Deutsche Telekom's goal is to fill 30 percent of upper and middle management jobs by women by 2016.

MORRISSEY: I see this as a concerted effect. It needs to be led by business. It needs to be supported by government. I'm very anti-quotas. And I think that there are a few reasons why. One is I think it's rather demeaning to women. But, also, I think it does suggest that it is just about a numbers game, it's not about the business results.

If we're trying to actually change the way business decisions are made, the way that ultimately -- and it hasn't happened yet because it's early days -- but ultimately how shareholders will receive (INAUDIBLE), then we've got to really make sure that it's the best person for the job, but that maybe means that it's a different sort of person than it was in the past.

MANN (on camera): It's difficult to prove that increasing the quota of that different sort of person -- those women -- actually makes for better companies or better business performance. But surely, being open to using all the talent available to grow Europe's economies can only make business sense.

That's it for this week's show.

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